KARACHI: The stock market opened on a positive note last week as Saudi deposits of $3 billion were rolled over for a year while the International Monetary Fund (IMF) pledged to expand relief support against the floods and reconstruction.
Arif Habib Ltd said the momentum could not be sustained due to the continued decline in the foreign exchange reserves of the State Bank of Pakistan (SBP), which fell by $278 million on a weekly basis. As a result, the rupee depreciated further against the greenback and closed at 239.65 towards the end of the week.
Furthermore, foreign direct investment in the first two months of 2022-23 fell by 26% on an annual basis.
Large-scale manufacturing output fell 1.4% a year and 16.5% a month in July.
Equity investors opted for value buying as the country was expected to receive $1.5 billion, $0.5 billion and $0.2 billion respectively from the Bank Asian Development Bank, the Asian Infrastructure Investment Bank and the Japanese government.
Additionally, investors were also expecting the World Bank to provide flood-related support of $1.7 billion.
In other emotional market news, the current account deficit narrowed 54% year-on-year in August, further cushioning the index’s overall decline over the week.
As a result, the stock market closed at 40,620 points after losing 1,059 points or 2.5% a week ago.
At the sector level, negative contributions came from exploration and production (251 points), banking (246 points), cement (123 points), electricity (74 points) and construction companies. marketing of oil (73 points).
The sectors that contributed positively were tobacco (15 points) and auto parts (2 points).
At certificate level, the negative contributors were Pakistan Petroleum Company Ltd (117 points), Oil and Gas Development Company Ltd (84 points), Lucky Cement (83 points), Meezan Bank Ltd (66 points) and Habib Metro Bank Ltd ( 51 dots). .
Positive contributions came from TRG Pakistan Ltd (21 points), Pakistan Tobacco Ltd (15 points), Unity Foods Ltd (eight points), Fauji Fertilizer Company Ltd (six points) and Ibrahim Fibers Ltd (four points).
Foreign purchases continued over the previous week and reached $5.09 million compared to a net purchase of $13.8 million last week. Significant purchases were observed in the sectors of technology ($6.6 million), exploration and production ($0.5 million), cement ($0.5 million) and oil and gas marketing ($0.3 million).
On the local front, sales were reported by insurance ($3.3 million) and mutual funds ($2.4 million).
Average daily volume hit 166 million shares, down 9% from a week ago. The average daily value traded was $26 million, down 13% from the previous week.
According to AKD Securities, the easing of international commodity prices, especially oil, should be a welcome development going forward. This will reduce the pressure on the country’s external account.
On the other hand, the strength of the dollar following the 75 basis point hike in the key rate in the United States should put pressure on the exchange rate, which could harm confidence.
“We advise clients to remain cautious while building new market positions,” he added.
Posted in Dawn, September 25, 2022